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What is Education Fraud?

Date Published
Jan 06, 2023

Education fraud is an attempt by individuals and/or institutions to take advantage of public funds set aside for students and low-income or at-risk communities. Education fraud is unfortunately common, especially in the Americorps program and other federal grants and loans.

Education fraud can take place at any level of schooling. Oftentimes, private schools and universities may receive public funds in the form of student loans, Pell Grants, research grant opportunities, and more. If you have information about attempts to falsify information or draw down federal or state education funds, you may be able to make a claim as a whistleblower.

Whistleblowing Examples in Schools

According to the National Center for Education Statistics, the US earmarks around $800 billion for education annually. If this amount were divided evenly, it would amount to about $15,621 per public school student enrolled each fall. This allocation, while hefty, only takes into account the amount spent on primary and secondary schools by the federal government. Colleges and universities in the US spend around $671 billion each year. Of these expenses, $430 billion are spent by public institutions, $228 billion are spent by private non-profit schools, and $13 billion at private for-profit institutions.

School fraud can be harder to spot when it involves federal funding, as it often takes insiders to identify and report improper use of funds, false certifications of hours, or hiring ineligible employees for grant programs. The Americorps program is particularly prone to fraud in education, as benefits often involve the verification of individual time sheets.

School administrators, other educators, fellow Americorps members, and even students can all become grant fraud whistleblowers. Anyone with inside knowledge of how government funds in schools are spent can report false claims with the help of an education fraud attorney. For example, a fellow Americorps member may become aware that someone else in their district is submitting false time sheets while continuing to draw down their stipend.

Similarly, a researcher or administrator at a major university might become aware that a research team is failing to report their findings properly, due to fear of losing grant funding. They may be able to become a higher education fraud whistleblower by speaking to an attorney about proof that public funds are being misspent.

Recent Examples of Education Fraud Settlements

The False Claims Act can be used to protect students, taxpayers, and the education system from fraud. In one recent case, the Denver public school system paid $2.1 million to resolve allegations of Americorps fraud. For 2015 and 2016, the Denver public school system allegedly certified hours as performed by Americorps service members when they either were not done or did not qualify. This led to an overpayment of federal funds, without the corresponding benefit to the community. The school administration system also allegedly “double-counted” paid teacher hours as Americorps service hours, allowing them to draw down grant funds in order to reimburse their employee costs.

A second 2021 case also involved overpayment of Americorps funds, this time involving the University of North Carolina at Chapel Hill (UNC-CH), East Carolina University (ECU), and the North Carolina Commission on Volunteerism and Community Service (NCCV). These three entities allegedly approved impossible 16 hour service days submitted during periods of holidays and school breaks for Americorps educators, while continuing to collect federal funds. The case was settled for $842,500 in fines and back payments in support of the program, which is designed to benefit at-risk and low-income youth in the community.

Finally, the False Claims Act can also be used to target individual Americorps members who are not following through on their commitments. A Madison County woman was supposed to provide tutoring in STEM at Madison Southern High School in Kentucky through Americorps. In exchange, she received a monthly living allowance. She allegedly provided six false time sheets to claim the stipend, despite not performing her duties as an educator during this time.

Understanding the Implications of Education Fraud

Education fraud, even when it is as small in scale as time sheet falsification, has very real repercussions for communities in need and for the taxpayers who fund Americorps and other education grants and programs. In the words of Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, “When false claims are submitted to national service programs, it depletes their limited resources and undermines their valuable work, which is designed to benefit and improve our communities. In this case, each false timesheet resulted in more than simply the loss of money; it caused a loss of valuable high school tutoring, increased college opportunities within a community, and the promotion of critical academic fields that support and benefit our entire community. We recognize these [education fraud] cases have both monetary and non-monetary impacts.”

Fraud, Education, and Whistleblowers

Whistleblowers can help protect opportunities for students and preserve public funds by reporting fraud. They may also be eligible to earn significant payouts in exchange for their honesty and are protected from being fired, demoted, harassed, or otherwise retaliated against for disclosing information about education fraud.

For more information, or to discuss the specifics of your situation, speak to an education fraud attorney today. The team at Tycko & Zavareei LLP has years of experience in shedding light on fraud of all kinds and ensuring that whistleblowers are protected. We can follow through on your case, let you get back to your own interests, and still ensure that justice is served. We can also advocate for the highest possible whistleblower award in the event that your information leads to a successful recovery. A consultation with our team is complimentary and confidential via our online portal.

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